Sure, they always strut his amphitheater, but they always refer to it as the Colosseum. He never gets named in connection to it unless you're talking to people that really know their stuff. Diocletian's got a central starring role in every textbook on the Roman Empire for the role he played in the split between East and West.

Actually, that's odd, because we do know what happened. Basically, the Roman empire cut their silver currency with cheaper metals in order to increase the amount of currency, but also to be able to pay using less real silver.

I think Ron Paul was drawing an allusion to this and inflationary policies of the Fed. Now, whether this practice led to the downfall of the Roman Empire is debatable when so many other things may have contributed.

But it is telling that Krugman is not aware of this historic instance of increasing the monetary supply because it is often used as the first story of how and why the Fed was created in the first place.

"it is often used as the first story of how and why the Fed was created in the first place."

by who? when? where???.... I'm pretty sure the Fed was created because everyone got scared shitless that JP Morgan had to personally BankRoll WW1...

But whatever... Roman empires for hundres of years had been "debasing its currency" after hundreds of years. Diocletian actually did not create the problem but inherited it. His solution? Price controls and property seizures. Eventually slowly introducing a more stable currency.

Emperor Aurelian actually tried to introduce "stronger" currency however it turned out the supply of money was the problem. No matter how many "good" coins Aurelian minted he didn't understand how important it was to remove the "bad" money from circulation.

By the time Diocletian came around imperial money was almost non existent so he could introduce "new" money.

I'm not sure why I keep getting downvoted for posting facts and information. I assumed it was common knowledge that the story of fiat currency begins with the Roman empire and is currently being told by the Fed. It's not that controversial. It just is. It's just surprising that Krugman doesn't even acknowledge this--- as if the Fed is doing something other than fiat money.

I'm not saying that fiat money is a bad thing necessarily in its modern form. I'm just saying it's surprising that an economist would not know the history of it.

It's depressing that I get downvoted for merely answering his question with a factual answer--- one which he couldn't do himself with a simple Google search of fiat currency in the Roman Empire.

Why are facts so hated by Paul Krugman fanboys?

Furthermore, Ron Paul made no mention of the Diocletian monetary policy. That was Krugman throwing up a straw man argument. Krugman first attacked Ron Paul by accusing his policies of being outdated and repeating history. Ron Paul responded to this accusation by comparing Krugman's policies to the inflationary policies of Ancient Rome.

Krugman either pretended not to understand or did not understand. In either case, he made a flippant remark about not supporting the Diocletian monetary policy which was not what Ron Paul was saying anyway, and making it seem as if Ron Paul was supporting that Ancient Roman monetary policy when in fact, Ron Paul was pointing out that it was in fact Krugman's policies which were inflationary, just like the Ancient Romans.

What I am most disappointed about is that here is a perfect chance to put to rest what, exactly, is wrong with Ron Paul's idea of comparing current inflationary policies which devalue individuals' savings while dumping money into bankers' vaults with inflationary policies of the past. But Krugman does not do this. Not only does Krugman not do this, but people in this AMA don't even want to hear the answer to this as any attempt to raise this issue is summarily downvoted.

This is referencing a recent Bloomberg debate where Krugman tried to argue his point with Ron Paul and Ron Paul responded by claiming the Byzantine Empire never started any wars (history pro-tip, they started hundreds).

Well, not really, but Krugman thinks Ben Bernanke should be doing more, while Ron Paul thinks he's a fraud (I don't really understand Ron Paul's position, but those are his words). Ben Bernanke has done a lot though, really most of what he can, so policy-wise he's pretty close to Krugman's views, at least compared to the average politician. That's why Krugman's main point is that we also need government stimulus, preferably the kind with a long term payoff like education spending or the kind that can be bought cheap during a recession, like road building, and lots of it. If you'd like an example of what happens when you fail to do both the monetary side (Bernanke did a lot) or the spending side (congress has really blocked this hard as has lowered state revenue/spending via lower property taxes), just look at Europe.

I understand what's up just didn't get OP's position. Honestly screw Ron Paul I'll take all the down votes needed but he is a fucking dumb ass. Period. No questions asked. He always claims to have known about the 2007 recession. Yeah no freaking duh you did after 17 years of rapid expansion one would assume we would have been overheating and slow down. The economy is in shambles underneath our fed and there isn't much to be optimistic about but you can change it through manipulation and if we just get rid of the fed everything will go SPLAT! Ben Bernanke is the best man for the job he is a genius. The first round of his quantitative easing was sublime, and although Japan has crippling debt he was at least able to get their economy moving by using GDP targeting instead of inflation rate targeting. He took this principle and spread it throughout Europe. Some people believe some of the success Germany has experienced is partially explained by this change. I don't care if your democratic or conservative Ben Bernanke is perfect.

The real thing we should be in an uproar about is the negligence of both Obama AND Congress to propose and set a budget for 2013.

By the way our debt to GDP ratio is over 100% and it has been predicted the 90% would be unstable we need to take a serious look at what were doing.

Not so much a motto but more an official stamp. It was placed on public documents, coins, military equipment etc. to denote that the item belonged to the Roman Republic or was issued by its government.

Paul, we have the actual coinage from Diocletian's era and there are a ton of contemporaneous documents explaining Roman currency at length and in depth, over literally hundreds of years. To say this knowledge is just lost in the sands of time is really disingenuous.

We can't agree what happened in the 70s or after WWII, even with all that data, and we're just supposed to take ron paul's word for it, what happened in ancient rome, with only a miniscule fraction of data?

It is strangely entertaining to see a Princeton professor and Nobel prize winner act like such a petulant child. When confronted by the notion that Dr Paul's monetary theories had been proven inadequate 150 years ago Dr Paul simply replied that the debasement of a nation's currency has led to its demise for thousands of years. You can look at the Greeks, the Romans, the Weimar Republic, Hungary or even Argentina or Zimbabwe if you want very recent comparisons. An nobel winning economist should probably be aware of such occurrences.